Author: FX

On Thursday, the Bank of Mexico rose the key interest rate by 50 basis points to 10.5%, following the same hike from the Federal Reserve. According to the Research Department at BBVA, Banxico will decouple from the Fed in 2023 and they see lower growth and inflation in Mexico.  Key Quotes:  “We expect lower growth and inflation in 2023. GDP would grow 3.0% in 2022 driven by the manufacturing sector. We stick to our 0.6% GDP growth forecast for 2023 but with an upward bias considering the 3Q22 data, INEGI’s revisions, and the effect of nearshoring.” “November will mark the…

Gold managed to rise slightly above the 200-day SMA despite Thursday’s sharp decline. While above here, XAU/USD retains a bullish bias, FXStreet’s Eren Sengezer reports The $1,780/$1,775 area aligns as initial support “In case XAU/USD stabilizes above $1,790 (200-day SMA) and confirms that level as support, it could test $1,800 in the short term before targeting $1,830 (Fibonacci 50% retracement of the long-term downtrend) and $1,860 (static level).” “On the downside, $1,780/$1,775 area (Fibonacci 38.2% retracement, 20-day SMA) aligns as initial support before $1,740 (static level) and $1,720 (100-day SMA, 50-day SMA).”   Source link

Gold rebounds from weekly lows after being able to hold above $1,770. Wall Street indices drop more than 1% on Friday, adding to weekly losses. US data: Preliminary November S&P Global PMI below expectations. Gold price rebounded further from weekly lows following the release of the US S&P Global PMI report, hitting a fresh daily high at $1,793. It is about to end the week at the same level it had seven days ago. Moving away from $1,770 XAUD/USD broke above $1,785 after the release of the US S&P Global PMI report that came in below expectations. According to the…

EUR/USD rose to 1.07 after the hawkish ECB surprise. Economists at Nordea expect the pair to stretch higher toward 1.10 over the next month. EUR/USD seen at 1.13 by the end of 2023 “A high possibility of a new year rally in stock markets (which would favour a weaker USD) together with a rate differential which has moved in favour of the EUR imply a high likelihood for EUR/USD to move even higher than the current 1.06. We believe that from a tactical perspective, EUR/USD is most likely to see 1.10 over the next month.”  “Our 3M forecast of EUR/USD…

EURUSD skims the 100 hour MAMoreover a move below runs into other targets from recent lows including the swing area between 1.0584 and 1.0594, and the 50% midpoint of the move up from the December 7 low at 1.05889.As I type, the 100 hour MA is being broken. Now the question is “Do the sellers keep the momentum going?”. Source link

Economists at ANZ Bank have raised their Gold price forecast for the end of next year to $1,900.  Some scope for a retracement of recent gains in the near term “Short term, we see some scope for a retracement of recent gains. This would be largely off the back of a stronger USD. Investor positioning shows non-commercial short positions built to a sizeable level in Q3 2022, but some of those positions have been trimmed as expectations of a slower rate hike cycle developed.” “As global growth slows through Q2 amid elevated geopolitical risks, we expect safe haven buying to…

S&P Global PMIs in the United States sparked recession jitters and bolstered the US Dollar. Eurozone data was better than estimated, though inflation remains high, while PMIs in contractionary territory. EUR/USD Price Analysis: Daily close below 1.0592 to exacerbate a fall to the 20-day EMA. The EUR/USD remains subdued during the North American session, following monetary policy meetings by the Federal Reserve (Fed) and the European Central Bank (ECB), with both entities raising rates amidst a period of high and stickier inflation. However, a surprisingly hawkish tone employed by the ECB President Christine Lagarde capped the fall of the Euro…

Indices Fundamental Forecast: Bearish Recommended by James Stanley Get Your Free Equities Forecast It was a big week in stocks as the Tuesday CPI report brought a reversal scenario into the equation that got another shot-in-the-arm on Wednesday at the FOMC rate decision. Hopes for a FOMC pivot into rate cuts were dashed as Powell struck a hawkish tone, warning that the Fed ‘has a ways to go’ with inflation. And this really furthers the theme that’s been pushing stocks throughout this year: The Fed hikes to address inflation, markets get hopeful that the Fed has done enough, or at…

<p>Early trading showed some resilience in equities but that's quickly evaporated. The selling picked up after the soft US services PMI and that's interesting because it means that the bad-news-is-good-news narrative is failing. That's because the Fed appears to be determined to hike despite mounting signs of a slowdown.</p><p>Said another way, the market is growing more worried about a tougher recession.</p><p>Technically, this looks like a head-and-shoulders top with a target at 10,400, or another 3% lower from here. I can certainly see a case where we close near the lows of the year.</p> This article was written by Adam Button…

The Mexican Peso (MXN) has been underperforming recently. However, economists at ING expect the USD/MXN pair to move back toward 19.00. Banxico dances toe-to-toe with the Fed “Banxico followed the Fed again by hiking the policy rate by 50 bps to 10.50%. That keeps the 600 bps+ policy spread over US rates and should keep the MXN supported. Banxico also said that further rate hikes should be expected. In practice, this should mean another 50 bps hike in February to match the Fed.” “MXN underperformance should not last long. High rates, low volatility, and Mexico proving the most likely candidate…